ADRE LAW BOOK 2025

C. The commissioner may deny, suspend or revoke authorization to accept timeshare interest res ervations under this section to any person who has violated any provision of this chapter. 32-2197.11. Developer supervisory duties The developer shall supervise, manage and control all aspects of the offering of the timeshare plan, including promotion, advertising, contracting and closing. The developer is responsible for each timeshare plan registered by the developer with the department and for the actions of any sales agent or managing entity used by the developer in the offering or selling of any registered time share plan. Any violation of this article that occurs during the offering activities shall be deemed to be a violation by the developer as well as by the sales agent or managing entity who actually committed the violation. The developer is responsible for the actions of the association and man aging entity only while they are subject to the developer’s control, as provided in the timeshare instruments or by law. 32-2197.12. Blanket encumbrance; lien; alternative assurance Excluding any encumbrance placed against the purchaser’s timeshare interest securing the pur chaser’s payment of purchase money financing for the purchase, the developer is not entitled to the release of any monies placed in escrow under section 32-2197.05 with respect to each timeshare in terest and any other property or rights to property appurtenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, until the developer has provided satisfactory evidence to the commissioner of one of the following: 1. The timeshare interest together with any other property or rights to property appur tenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, are free and clear of any of the claims of the developer, any owner of the underlying fee, a mortgagee, judgment creditor or other lienor or any other person having a blanket encumbrance against the timeshare interest or appurtenant prop erty or property rights. 2. The developer, any owner of the underlying fee, a mortgagee, judgment creditor or other lienor or any other person having a blanket encumbrance against the timeshare interest or appurtenant property or property rights, including any amenities represented to the pur chaser as being part of the timeshare plan, has recorded a subordination and notice to cred itors document in the appropriate public records of the jurisdiction in which the timeshare interest is located. The subordination document shall expressly and effectively provide that the interest holder’s right or blanket encumbrance does not adversely affect and is subordi nate to the rights of the owners of the timeshare interests in the timeshare plan regardless of the date of purchase, from and after the effective date of the subordination document. 3. The developer, any owner of the underlying fee, a mortgagee, judgment creditor or other lienor or any other person having a blanket encumbrance against the timeshare interest or appurtenant property or property rights, including any amenities represented to the pur chaser as being part of the timeshare plan, has transferred the subject accommodations or amenities or all use rights to the accommodations or amenities to a nonprofit organization or owners’ association to be held for the use and benefit of the owners of the timeshare plan. The organization or association shall act as a fiduciary to the purchasers, if the developer has transferred control of the organization or association to the owners or does not exercise

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